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The Labor Market Impact Of Covid-19 And The Role Of E-Commerce Development: Evidence From Indonesia

Author

Listed:
  • Masagus M. Ridhwan

    (Bank Indonesia)

  • Asep Suryahadi

    (SMERU Research Institute)

  • Jahen F. Rezki

    (Institute for Economic and Social Research)

  • Immanuel Satya Pekerti

Abstract

We This study assesses the impact of COVID-19, measured by the reduction in work mobility and e-commerce growth, which has been expected to counteract the adverse effect of COVID-19, on the labor market outcomes of individual workers in terms of their employment prospects, work hours, total earnings, and earnings per hour in Indonesia. The data analyzed are combined from the labor force survey and ecommerce transaction values collected by Bank Indonesia, which is unique and publicly unavailable. The findings confirm that COVID-19 has adverse effects on workers’ labor market outcomes. However, e-commerce growth did not counteract the negative impact of COVID-19 as expected, but it still played a role as an employment buffer during the crisis. While e-commerce growth creates jobs, those jobs are mainly self-employment. Furthermore, e-commerce growth tends to suppress the earnings of workers. Our results imply that to optimize e-commerce to improve labor market outcomes beyond jobs creation in the informal sector, efforts are needed to increase the productivity of workers involved in e-commerce, such as through skills enhancement and other capacity-building programs.

Suggested Citation

  • Masagus M. Ridhwan & Asep Suryahadi & Jahen F. Rezki & Immanuel Satya Pekerti, 2021. "The Labor Market Impact Of Covid-19 And The Role Of E-Commerce Development: Evidence From Indonesia," Working Papers WP/10/2021, Bank Indonesia.
    • Handle: RePEc:idn:wpaper:wp102021
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    More about this item

    Keywords

    COVID-19; labor market; mobility; e-commerce; Indonesia;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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